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10 July 2007

Full Of Life(HKTDC Toys & Games , Vol 02,2007)

PVC Toys

AAA Plastic Mfg Co Ltd manufactures animal replicas for its own AAA brand as well as figurines on an OEM or ODM basis

It feels like a fantasyland, with hundreds of lifelike replicas of wild animals including dinosaurs, tigers, lions, elephants and giraffes striking a pose alongside eye-catching figurines of distinguished characters such as soccer stars and gladiators. In actuality, this is the spacious and delightful showroom of AAA Plastic Mfg Co Ltd.

The firm manufactures animal replicas for its own AAA brand as well as figurines on an OEM or ODM basis. "Our toys are made mainly from PVC and to a lesser extent HIP," says general manager Bill Chan. "Our products are at the high end of Hong Kong's PVC toy supply chain."

In terms of value, he says that the company's animal replica collections account for 65%-70% of total production output. The balance is accounted for by figurines.

"Our open lines include dinosaurs, wild animals, insects and aquatic creatures," Chan notes. "Our dinosaur is a long-lasting theme, helped by the fact that from time to time there are films and TV series about these creatures."

Among other animals featured are apes, pandas, snakes, tortoises, walruses and penguins. Further, apart from individual animals, AAA also offers forest play sets with trees and animals, as well as animal farm sets with cattle and sheep.

"We do a lot of research on animals' shapes," Chan remarks. "We come up with 10-20 new items every year to keep customers interested in our products. If enough customers say they are interested in a particular toy animal, we will make it. We put a premium on meeting customers' requirements." As for figurines, he says the firm can conduct product development as well as manufacturing for clients.

The company was founded by Chan's father in 1968, when Hong Kong's toy industry was booming. "My father had been in the toy sector, so when he felt the time was ripe he set up his own business. At that time, the company only had 10 people or so," Chan relates, saying that in the interim the company has grown considerably.

Today, AAA has a workforce of 600 who are mostly deployed at its 5,500-square-metre plant in Pinghu in Guangdong Province on the Chinese mainland.

"We moved our manufacturing operations to the mainland in the 1980s. Our first factory was in Zhuhai and water was our main means of transportation for goods and materials," says Chan. "After a few years, we found this mode of transportation unreliable so we moved to our present location. Now we transport goods overland, and have better control of scheduling."

Despite the application of technology such as injection moulding, Chan notes that manual labour remains important to manufacturing operations. "About 60% of our workers are engaged in manual procedures such as colouring, paint spraying and applying stickers to our toys," he explains.

"At this time, a labour shortage is a problem that everyone in the industry is facing," he continues. "We try to retain staff by paying higher salaries than a few years ago, while the rising value of the RMB against the Hong Kong dollar further adds to our costs."

Another perennial challenge, says Chan, is competition, with some rivals offering unrealistically low prices. However, he claims that AAA remains a profitable concern. "We are definitely not the cheapest supplier, but we stand out in terms of quality. That's why customers have confidence in us and are ready to pay more."

At AAA, the most important thing is to think more for the customer and to offer more perspectives. "For example, a customer may want dinosaurs but have little knowledge about the technical aspects of production," says Chan. "A design that appears marvellous may not be easily realised, so we offer help. We can participate in product development from conception to prototyping to ensure smooth production."

Europe accounts for 55% of AAA's turnover, and the US contributes a further 40%. "Our customers include retailers, distributors, wholesalers and department stores," says Chan.

AAA can also offer insights into how an old family business can continue to thrive. "After handing over the business to the next generation, the older generation has to trust them and give them free rein to run the business," says Chan, who sees his carte blanche to run AAA as being highly conducive to its ongoing development. Paradoxically, making playthings for kids, he says, is certainly not child's play and AAA has experienced its fair share of hardship in the past.

"Sometimes, the lead time is very short," Chan notes. "Once, we had to operate around the clock for a whole month to meet delivery deadlines." Fortunately, a sense of solidarity among the staff has eased potential problems. "Many of our employees have been with us for a long time, and are loyal to the company. Accordingly, when we accomplish something together we are all very happy."

AAA is clearly a company full of life that also possesses the vision to achieve future success.

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